Four Expensive Fast Cash Loans

Whenever you hear “fast cash” in any ad you should look the other way. There’s really no smart way to borrow cash fast. Each method involves spending a lot of money. In the end, you’ll be left worse off than you were when you started. Here are four expensive fast cash loans you should avoid.

Title Loans

If you own a car these wonderful people will give you cash on the spot. In exchange, you’ll just have to give them ownership of your car. Oh but don’t worry, they’ll give it back once you pay up (with interest). If you don’t, you can kiss your car goodbye. They will be the new owners of your car, even if you’ve already paid back most of your loan. They will simply keep your payments and get your car. They prey on those who are desperately in need of money and are willing to do anything to get it.

Refund Anticipation Loans

Tax refund anticipation loans (RAL’s) are loans that are offered to you when you file your taxes at places like H&R Block. Say you’re expecting a tax refund of $800. These guys will offer you $700 cash up front. It’s a pretty tempting offer, especially if you’re very poor and need to make the rent in a few days. So these guys pounce on those in need. The interest rates charged are ludicrous. Another thing that makes these loans bad is that the person doing your taxes has an incentive to make your refund bigger. And when the hammer comes down on you from the IRS they won’t help you.

Pawnshop Loans

You’ve heard of pawnshops before. They give you money (pennies on the dollar) for stuff you no longer want. It’s a quick way to get cash. But these pawnshops have gotten into the loan business as well. They will also hold your items for you in exchange for some cash. Say you bring in a $200 video game system. They will loan you only $100 though. If you don’t pay it back in full, they will keep your item and any payments you’ve made until you defaulted. As if that wasn’t a big enough ripoff, they will also charge you interest on that loan, storage fees and any other fee they can make up. Talk about taking advantage of the poorest of the poor.

Payday Loans

Here’s how payday loan works. You show them your check stubs from work in order to verify how much you make. Then you write then a postdated check with the amount you want to borrow (plus interest and fees) and they hand over the cash to you. Sounds nice, right? Well when you realize that they can charge you not 20% but 40, 60, 80 and even 100% interest they don’t sound so nice any more.

These payday loans are very short term with a very high interest rate, leaving you just weeks, not years, to pay them back. Sure you can delay your payment, but they will add another fee on top of that. They are the definition of predatory lenders. But if you have no other options, what else are you to do? Some people get a payday loan when they are on the verge of being evicted and they need money immediately.